Like back in 1949 during the California Gold Rush, we are now seeing a 21st Century boom in the new residential building industry. So the Insurance companies are tightening the reins on the mules.
Please double check and review the definition of “Project” for your sub-contractor or general contractor liability policies. When it comes to residential construction defect claims, we are seeing policy language, including “Project” endorsements that limit or exclude coverage. We are finding a limit on the number of Homes within the overall housing development. Not to be confused with the total homes worked on by the Insured.
The “Project” is the TOTAL number of homes within the development. This includes ALL Phases, present and future. So if the insured is only contracted to work on 50 homes, but the Project has a total development of 100 homes, this endorsement could exclude coverage.
The intent of the endorsement is to limit the construction defect exposure. The higher the number of homes within the Project will increase the potential for construction defect lawsuits. That is why they limit the number of homes on the endorsement.
So please remember to double check the insurance application questions, policy language and recognize any “Project” endorsements.